Marketing Department Organization

The company must design a marketing organization that can carry out marketing strategies and plans. If the company is very small, one person might do all of the research, selling, advertising, customer service, and other marketing work. As the company expands, a marketing department emerges to plan and carry out marketing activities. In large companies, this department contains many specialists. They have product and market managers, sales managers and salespeople, market researchers, advertising experts, and many other specialists.

To head up such large marketing organizations, many companies have now created a chief marketing officer (or CMO) position. The CMO heads up the company's entire marketing operation and represents marketing on the company's top management team. The CMO position puts marketing on equal footing with other C-level executives, such as the chief executive officer (CEO) and the chief financial officer (CFO).18

Modern marketing departments can be arranged in several ways. The most common form of marketing organization is the functional organization. Under this organization, different marketing activities are headed by a functional specialist—a sales manager, advertising manager, marketing research manager, customer-service manager, or new-product manager. A company that sells across the country or internationally often uses a geographic organization. Its sales and marketing people are assigned to specific countries, regions, and districts. Geographic organization allows salespeople to settle into a territory, get to know their customers, and work with a minimum of travel time and cost.

Companies with many very different products or brands often create a product management organization. Using this approach, a product manager develops and implements a complete strategy and marketing program for a specific product or brand. Product management first appeared at Procter & Gamble in 1929. A new company soap, Camay, was not doing well and a young P&G executive was assigned to give his exclusive attention to developing and promoting this product. He was successful, and the company soon added other product managers.19 Since then, many firms, especially consumer-products companies, have set up product management organizations.

For companies that sell one product line to many different types of markets and customers that have different needs and preferences, a market or customer management organization might be best. A market management organization is similar to the product management organization. Market managers are responsible for developing marketing strategies and plans for their specific markets or customers. This system's main advantage is that the company is organized around the needs of specific customer segments. Many companies develop special organizations to manage their relationships with large customers. For example, companies such as Procter & Gamble and Black & Decker have large teams, or even whole divisions, set up to serve large customers such as Wal-Mart, Carrefour, JUSCO, or Home Depot.

Large companies that produce many different products flowing into many different geographic and customer markets usually employ some combination of the functional, geographic, product, and market organization forms. This ensures that each function, product, and market receives its share of management attention. However, it can also add costly layers of management and reduce organizational flexibility. Still, the benefits of organizational specialization usually outweigh the drawbacks.

Marketing organization has become an increasingly important issue in recent years. As we discussed in Chapter 1, today's marketing environment calls for less focus on

products, brands, and territories and more focus on customer relationships. More and more, companies are shifting their brand management focus toward customer management—moving away from managing just product or brand profitability and toward managing profitability and customer equity. They think of themselves not as managing portfolios of brands, but as managing portfolios of customers.

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